The Time Warner Inc. chairman and CEO and his legal eagles are said to be close to a deal with the Securities and Exchange Commission and the Justice Department that would settle the dual investigation into accounting shenanigans at its America Online subsidiary.

The settlement, according to sources, could range as high as $650 million to $700 million.

A report yesterday in the Washington Post said the deal, being fast-tracked by Parsons, would be in the neighborhood of $750 million but a person familiar with the talks cautioned that it probably wouldn’t reach that high.

Earlier this month, Time Warner set aside $500 million for a potential settlement, signaling to some that it was closing in on a deal.

Neither the SEC nor the country’s No. 1 media company would comment on the talks.

As news of a possible SEC and DOJ settlement spread, investors, perhaps buoyed by the prospect that a settlement would limit damages from shareholder lawsuits, Time Warner shares rose, closing at $17.94, up 48 cents, or 2.7 percent.

A craftily worded settlement that not only allows Time Warner to limit shareholder lawsuit liability, getting it done sooner rather than later, would also let Parsons more aggressively to pursue acquisitions.

The freedom will come with the ability to issue stock, something Time Warner is barred from doing while the probe continues.

This past spring, the company asked Robert Walter, a director, to weigh various growth strategies, which could include acquisitions.

The SEC probe is centered on allegations that AOL fraudulently pumped up ad revenue to better position itself to acquire Time Warner in 2001.